Telematic Interactive Bulgaria EAD (BUL:TIB) Stock Goes Ex-Dividend In Just Four Days

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Telematic Interactive Bulgaria EAD (BUL:TIB) is about to trade ex-dividend in the next 4 days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Meaning, you will need to purchase Telematic Interactive Bulgaria EAD's shares before the 14th of June to receive the dividend, which will be paid on the 2nd of July.

The upcoming dividend for Telematic Interactive Bulgaria EAD is лв0.90 per share. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Telematic Interactive Bulgaria EAD can afford its dividend, and if the dividend could grow.

See our latest analysis for Telematic Interactive Bulgaria EAD

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Telematic Interactive Bulgaria EAD paid out just 24% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. It paid out more than half (62%) of its free cash flow in the past year, which is within an average range for most companies.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

Click here to see how much of its profit Telematic Interactive Bulgaria EAD paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. From this perspective, we're disturbed to see earnings per share plunged 40% over the last 12 months, and we'd wonder if the company has had some kind of major event that has skewed the calculation.

This is Telematic Interactive Bulgaria EAD's first year of paying a regular dividend, so it doesn't have much of a history yet to compare to.

The Bottom Line

Is Telematic Interactive Bulgaria EAD an attractive dividend stock, or better left on the shelf? Its earnings per share have been declining meaningfully, although it is paying out less than half its income and more than half its cash flow as dividends. Neither payout ratio appears an immediate concern, but we're concerned about the earnings. In summary, it's hard to get excited about Telematic Interactive Bulgaria EAD from a dividend perspective.

If you're not too concerned about Telematic Interactive Bulgaria EAD's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. For example - Telematic Interactive Bulgaria EAD has 1 warning sign we think you should be aware of.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.